From The Wall Street Journal (via MLive.com):
After Walt Disney Co. refused to allow its Miramax Films unit to distribute the controversial Michael Moore documentary “Fahrenheit 9/11,” Miramax co-Chairmen Harvey and Bob Weinstein paid $6 million from their own pockets to acquire the film from the company. Six weeks later, “Fahrenheit 9/11” is a smash sensation, and the Weinsteins are widely assumed to be laughing all the way to the bank.
If so, the laughter may be muted. Despite their personal investment, the Weinstein brothers will not be the biggest financial beneficiaries of “Fahrenheit.” The real winner: a charity, or charities, as yet unnamed, that will receive about 60 percent of the net profit ultimately generated by the film — a tally that could be tens of millions of dollars. The Weinsteins, meanwhile, will pocket about 40 percent of the net, according to people familiar with the deal.
And who will pick the charities that get the money? Disney, the company that refused to release the movie, without having to consult either the Weinsteins or Mr. Moore. It’s all the unexpected result of yet another strange tussle between Disney and the Weinsteins, the corporate odd couple that has had a tough time getting along since Disney’s 1993 acquisition of Miramax.
Over the years, Disney and the Weinstein brothers have fought over issues of control, compensation and budgets. But their relationship was pushed to the brink in May, when a public spat broke out over Disney’s refusal to allow Miramax to release “Fahrenheit.” As Mr. Moore made the media rounds accusing Disney of censoring his movie, Disney executives were furious that the Weinsteins seemed to side with him.
So when negotiations began for the Weinsteins to buy the film back from Disney, the discussions quickly took on the stern parent/naughty child tone that has characterized many moments between the parties over the years. According to people familiar with the matter, the media company was determined to punish the brothers for their alleged bad behavior by limiting the extent to which the Weinsteins could benefit.
In essence, Disney refused to sell the film to the brothers unless they agreed that they would not benefit personally any more than they would have under their employment agreement. That is still a lot of money: Under that complex deal, the Weinsteins typically pocket about 40 percent of the net profit from any Miramax picture, after the costs of distribution, prints and advertising and talent participations are deducted. But people close to the deal say that Disney demanded that the remaining 60 percent go to a charity or charities of its choice.
The Weinsteins, these people say, had little choice but to agree because they wanted to get the movie out quickly.Michael Eisner is a vindicitive SOB, just ask Gregg Easterbrook….